Jim Zellmer's View from Madison

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Monthly Archives: December 2012

ON A SHOESTRING In 1972, when we had been married for only six months, my wife, Maureen, and I bought an old car for £60 and drove from London to Kabul. When we got there we sold it for a small profit and from Afghanistan we continued through Southeast Asia and ended up sailing from Bali to Australia by yacht. While living in Sydney, we found people were interested in where we’d been and how we’d done it so we decided to publish Across Asia on the Cheap and that’s how Lonely Planet started. The book sold well and inspired us to write Southeast Asia on a Shoestring, so we spent 1974 back on the road. Ours was the first guide to a region that wasn’t well known as a tourist destination at that time.

CHANGING TIDES We were definitely shoestring travellers. We wrote guides for young people like us, who travelled slowly and lived on a budget. There’s a lot of talk today about how tourism damages the environment but I think there are compensating factors. Shoestring travellers have more contact with locals and tend to put money into local communities rather than multinational companies. Lots of places rely on tourism and would be in far worse shape if people stopped visiting. Travel has changed: placing an international phone call used to take hours, if you could get through at all. In the days before e-mail you would go to post offices en route, sift through a pile of mail looking for letters from home and sit on the steps of your hotel to read them. Some of the romance has gone and I’m glad I had those experiences. It’s still a habit of mine to note down the hotels I stay in and how much they cost. Earlier this year, I paid US$12 for a room in a church mission guesthouse in the Solomon Islands.

First, in a decentralized system, errors are by nature smaller. Switzerland is one of the world’s wealthiest and most stable countries. It is also highly decentralized — with 26 cantons that are self-governing and make most of their own budgetary decisions. The absence of a central monopoly on taxation makes them compete for tax and bureaucratic efficiency. And if the Jura canton goes bankrupt, it will not destabilize the entire Swiss economy.

In decentralized systems, problems can be solved early and when they are small; stakeholders are also generally more willing to pay to solve local challenges (like fixing a bridge), which often affect them in a direct way. And when there are terrible failures in economic management — a bankrupt county, a state ill-prepared for its pension obligations — these do not necessarily bring the national economy to its knees. In fact, states and municipalities will learn from the mistakes of others, ultimately making the economy stronger.

It’s a myth that centralization and size bring “efficiency.” Centralized states are deficit-prone precisely because they tend to be gamed by lobbyists and large corporations, which increase their size in order to get the protection of bailouts. No large company should ever be bailed out; it creates a moral hazard.

Last Monday, December 17, it was 109 years since the first flight of the Wright brothers at Kitty Hawk. However, there was some skepticism in Europe about the flight. I had already read about that skepticism in the book “The Airplane: How ideas gave us wings“(1) (by Jay Spencer (2))

In the book, the reader gets the idea of the skepticism, of how in France there was also a race for performing the first flight and how it was not until the Wright brothers flew in Europe years later (1908) that people got convinced of that first flight in 1903. When I read about that, the idea that came to my mind was French chauvinism.

The story begins with a prominent New Orleanian named Fred Heebe. And naturally, this being the Big Easy, Heebe has a long relationship with his antagonist in the case, a lawyer named Jim Letten. Both were candidates for the U.S. Attorney appointment for the Eastern District of Louisiana in the earliest months of the Bush Administration. Letten got the job, and had been serving in that post until last Tuesday.

So, in 2001, Heebe went off to make his own fortune. After Hurricane Katrina, Heebe and his company, River Birch Landfill, began to win numerous contracts to handle garbage—suddenly a very lucrative enterprise. One contract in particular seemed to attract the office of the U.S. Attorney, Heebe’s old nemesis Jim Letten. In 2009, River Birch won an exclusive contract with Jefferson Parish for the next twenty-five years. The deal involved a hundred and sixty million dollars, and even a pledge that the Parish would close their own public landfill for the duration of the deal, making River Birch the exclusive provider for the next quarter century.
But soon River Birch’s deals began to look rotten. A state official pled guilty to conspiracy for accepting bribes from an unidentified landfill owner, suspected to be a River Birch executive. More federal indictments came in, including charges of mail fraud and money laundering against Dominick Fazzio, River Birch’s C.F.O. (Fazzio pled not guilty; he will go on trial in April.) Though no charges have been filed against Heebe, and he maintains his innocence, Letten’s investigation into River Birch has continued.

I posted a comment on Horace’s useful post: “@Walt French Yes, goog destroyed the value proposition of many competitors. As a developer, we consider the use of Google Maps, but after reading the TOS and understanding their throughput based terms, we moved elsewhere. Interestingly and for many years, they never enforced the terms. Many websites simply ignored the terms and used Google Maps as much as necessary for display, routing and geocoding. That changed a few years ago when Google began somewhat throttling users. It is doing something similar with “Google Apps” – email and online documents. The free version is gone along with ActiveSync support (this certainly says something about the state of Microsoft).

Finally, goog has used their streetview data collection scheme to collect an enormous amount of data, including controversially wifi snooping. Their cars and other data/media/network collection vehicles provide a freedom of movement vis a vis tom-tom and navteq.

Apple’s interesting opportunity, IMHO, is to feed user generated/contributed information (media, reviews, fixes, fun) back to Open Street Map (OSM) and begin to make their enormous iOS data pile available to developers.

Back in the 1990s, when about half the states’ voters slapped term limits on their state legislators, the idea was to rein in government spending and decrease the growth of government. Instead, spending per capita increased in those states relative to states without term limits. See this empirical paper, this survey article, or this book this book for details.

These results are counterintuitive insofar as we put stock in the intended mechanism, which was simple: As legislators spend more time in office, they tend to vote for more government spending – so if legislators are required by law to spend less time in office, they’ll spend less money.

One tire required attention today. I inserted 4 quarters and added 4 pounds of pressure to the driver side front tire. While replacing the air hose, I heard a woman shout “Hey Mister”. “The Mobil station up the street has free air”.

The lighting revolution is disrupting incumbents, such as Philips, Siemens-owned Osram and General Electric, which previously had an effective oligopoly in traditional lamps and lighting components, with a combined market share of more than 60 per cent.

The long lifespan of LEDs – up to 50 times more than an incandescent bulb – is a threat to the replacement market, which is a big source of the incumbents’ revenues.

To differing extents, they are therefore investing in new technologies, moving downstream into lighting systems (luminaires) and cutting manufacturing capacity in inefficient lighting.

In the short term, this is eroding profits and triggering job cuts as manufacturing LEDs requires different skills and is less labour intensive than making traditional lamps.

For a woman who is seen around the world as a disciplinarian, given to lecturing her European partners on the dangers of drowning in debt, the most surprising thing about Angela Merkel is her irrepressible sense of humour. It is hardly something you would expect from the chancellor of Germany when she greets you at the door of her office with a businesslike handshake and marches you smartly to a plain working table, boasting no more than a pot of coffee to serve to her guests.

The former scientist – daughter of a Protestant clergyman, brought up under communist rule in East Germany, who now dominates not only the domestic politics of her reunited homeland but also the interminable crisis-management of the EU – is cool and controlled. She thinks carefully before answering questions, and weighs all her words.

In countries such as Greece, Portugal and Spain in southern Europe, where drastic austerity measures are blamed on the German chancellor, she has been lampooned by furious demonstrators as a jackbooted Nazi. Yet in northern Europe she is respected in many countries – including neighbouring France – above their own domestic politicians, according to a recent survey.

“They pay attention to so much detail,” he said. “I never saw a Lego piece … that couldn’t go together with another one.”

Lego goes to great lengths to make its pieces really, really well, says David Robertson, who is working on a book about Lego.

Inside every Lego brick, there are three numbers, which identify exactly which mold the brick came from and what position it was in in that mold. That way, if there’s a bad brick somewhere, the company can go back and fix the mold.